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As the city's shops and offices closed for three days of mourning, more than 20,000 people wearing black looked on as the body of Governor Farahmand-Nekou - wrapped in a red, white and green Iranian flag - was driven through the city.

On Thursday, relief workers were finally able to start sift through the debris - after being kept back overnight for fear of further explosions - and used bulldozers and cranes to lift the wreckage.

A team of experts are also determining the health hazards from the fumes, said Hassan Rasouli, governor of Khorasan province. Many residents have been complaining of severe sore throats.

The wagons derailed at Khayyam station near Neyshabur and caught fire at 0400 (0030 GMT) on Wednesday.

As firefighters were attempting to douse the flames - watched on by crowds of curious villagers and officials - the train exploded, at 0935 (0605GMT).

Investigation

The blast was so powerful that local residents thought it was an earthquake - and Iranian seismologists recorded a quake of magnitude 3.6 at the time of the explosion.

"The entire area around me shook," said Hussein Hassani, who was several kilometres away at the time.

Relief workers are starting to sift through the wreckage

"It felt like a strong earthquake, but because the buildings didn't collapse (where I was) I knew it wasn't. Smoke could be seen... for hours."

The clay-home village of Dehnow, which was closest to the blast at about 550 metres (500 yards) away, was flattened and many villagers were believed to have been killed. The rest are thought to have been evacuated.

Casualties were also found in other nearby villages where buildings had collapsed. Some of those injured were either burned or hurt from the force of the blast, said hospital officials.

It is still unclear what caused the heavily-laden freight train to derail.

The government ordered an immediate inquiry into the disaster and has demanded the results by Sunday.

Officials want to know how the freight wagons, which were not attached to a locomotive, could have simply moved off down the line, eventually careering off the track and bursting into flames.

They are also demanding to know why the train - which was said to be on its way from central Asian countries to Iran's southern port of Bandar Abbas - was loaded with such a lethal combination of chemicals.

Iran is still recovering from a devastating earthquake on 26 December in the ancient city of Bam in the south-east of the country, in which more than 40,000 people died.

My cousin was on the train from Tehran to Mashhad, next to the fired train, and they were stopped at Attar station for about 1 hour, then a guy shouted and asked people to leave the train and to keep distance as much as they could, they all started to running out and after 5 minutes an awful explosion happened which caused them to fall down.
My cousin said it was just like what I've seen before in movies about the explosion in Hiroshima! She is still in shock and feels that her lungs are filled with tar. Bahar, Mashhad, Iran

My cousin, Henry Falsun is living in the city of Neyshabur. When I learnt about the disaster, I immediately phoned Henry. He told me that he had heard an explosion and that in his city there wasn't any damage.George Falsun, New York, USA

It was very terrible; I think the number of the victims will become more than 200. It happened in the north east corner, near the major city of Mashhad. The thing is it has happened when it is just 2 days to a great election here and this happen has shocked all the country.
Ali Emami, Shiraz/Iran

This blast is a miserably unfortunate incidence. I feel sorry for all the families that are facing it. The chemicals and toxic fumes in the air carry a potential danger for the inhabitants. I congratulate the people of Iran for showing strength and courage in this hour of mishap. May God bless all.Shubham Basu, Nashville, USA

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